2018 (7) TMI 1726 - AT - Income Tax

Grant of registration u/s 12AA - applicant society is non-cooperative and did not furnish the required information/details - Held that - As decided in case of Om Shiva Education & Welfare Society 2017 (12) TMI 1165 - ITAT DELHI AO in earlier Assessment Year has also admitted the same fact & had allowed exemption u/s u/s 10(23C)(iiiad) and by accepting the claim of Assessee the genuineness of its activities has also been accepted. Therefore, the factum of carrying charitable activities as also the genuineness of activities is established. Therefore, both conditions for getting satisfaction u/s 12AA are met with and therefore assessee is eligible for registration u/s 12AA of the Act Also in the present case there is no allegation of utilizing the land for commercial purposes and also there is no allotment of land at concessional rates. It is an admitted fact that the assessee was engaged in charitable activities. In view of the above facts and circumstances of the case, the Ld. CIT(E) is directed to grant registration to the assessee u/s 12AA of the Act - Decided in favour of assessee.

Issues Involved:
1. Rejection of registration under Section 12A of the Income Tax Act, 1961.
2. Lack of opportunity to present the case.
3. Vagueness of the society's aims and objectives.
4. Allegations of hasty order by the CIT.
5. Existence of the trust for educational and charitable purposes.

Issue-wise Detailed Analysis:

1. Rejection of Registration under Section 12A of the Income Tax Act, 1961:
The appellant society applied for registration under Section 12AA of the Income Tax Act, 1961. The CIT rejected the application citing non-cooperation and failure to furnish required documents, such as books of accounts, old registration certificates, and proper details of school fees and expenses. Additionally, the society did not provide evidence of compliance with the Right to Free and Compulsory Education Act, 2009, which requires 25% admission for economically weaker sections.

2. Lack of Opportunity to Present the Case:
The appellant argued that the CIT dismissed the application without giving a fair opportunity to present their case. The society responded to show-cause notices and provided the prospectus of the school, yet the CIT found the responses inadequate and non-cooperative.

3. Vagueness of the Society's Aims and Objectives:
The CIT concluded that the aims and objects of the society were vague and unspecific, and the society failed to substantiate its claim that its activities were charitable in nature. The CIT noted that the society did not adequately demonstrate that it was working in furtherance of its stated aims and objectives.

4. Allegations of Hasty Order by the CIT:
The appellant claimed that the CIT passed the order in haste, ignoring the facts, law, and provisions of the Income Tax Act. The CIT's decision was based on the society's failure to provide sufficient documentation and evidence to support its charitable activities.

5. Existence of the Trust for Educational and Charitable Purposes:
The appellant contended that the trust exists solely for educational and charitable purposes, not for profit. The CIT, however, found that the society did not provide sufficient evidence to prove this claim. The appellant referenced a similar case, Om Shiva Education & Welfare Society, where the CIT had also rejected the application for registration under similar grounds. The appellate tribunal in that case allowed the appeal and directed the CIT to grant registration under Section 12AA.

Tribunal's Decision:
The tribunal considered the appellant's arguments and previous judgments, particularly the case of Om Shiva Education & Welfare Society, where the tribunal directed the CIT to grant registration under Section 12AA. The tribunal found that the facts of the present case were similar to the Om Shiva case. The tribunal noted that the appellant society was engaged in running educational institutions and had been granted exemptions under Section 10(23C)(iiiad) in previous assessment years, establishing the genuineness of its activities.

The tribunal concluded that the CIT's observations were contradictory and that the society's charitable activities were genuine. The tribunal directed the CIT to grant registration to the appellant society under Section 12AA of the Income Tax Act, 1961.

Conclusion:
The appeal filed by the assessee was allowed, and the CIT was directed to grant registration under Section 12AA of the Income Tax Act, 1961. The tribunal emphasized the importance of considering the real purpose of the society and not denying approval based on technicalities. The tribunal's decision was based on the consistency of the society's charitable activities and previous assessments that recognized its educational purpose.

← Previous Next →